Preparing for a leadership shift
Succession planning for business and professional services firms
INSIGHT ARTICLE |
In well-established business and professional services firms, succession planning suggests an orderly, mindful process, where there’s a foundational transition strategy in place and the best of the best professionals are groomed for leadership. It is a process that hones budding leaders’ technical skills, as well as their ability to serve and retain clients. It is the process that helps develop rainmakers and encourages visionaries to target new products and practice areas. And, it is also the process that grooms some leaders for positions in firm governance and practice management. These leaders will keep the firm on a successful track financially and strategically when the current generation of visionaries retires.
Every business and professional services organization needs a methodology for succession planning. Whether your organization is large or small, power struggles for the leadership throne may ensue. Subsequently, there will be a wide spectrum of emotions that accompany any major change. Many organizations have polished systems in place for recruiting, retaining and training candidates for succession. They have instituted a well-thought-out plan for electing managing partners and executive committee members to govern the organization and to provide resources for department heads and firm administrators. Normally, they also have logical systems in place for strategic marketing, client development and long-range planning that complement succession planning. These organizations anticipate retirements and calculate the impact of losing these partners and their attendant productivity on a year-to-year basis, assuring the economic continuity of the organization.
Large firms, however, are not immune to caveats in succession planning, like market conditions, politics and personal ambitions. The challenges of succession planning manifest themselves in most firms, whether large or small, especially if these issues are not addressed immediately and satisfactorily. Some of these issues are:
- Who will fill the shoes of the current leadership of the firm?
- Will the firm’s founder(s) retire in the next 10 years or so?
- Are partners being made at the appropriate rate?
- Are professionals being developed into more than just technical experts today?
Succession planning implies future shifts in power. Acknowledging the need for change may be difficult for some leaders who are in the prime of their professional lives, but these power shifts need not be traumatic. Thoughtful deliberation of the issues that arise in succession planning can reduce financial and emotional woes. It is never too early to engage in strategic succession planning, and although thoughtful planning may not guarantee success, lack of planning may result in failure.
Succession planning is a complex and multifaceted process. How can we help you? Contact us by phone at 800.274.3978 or EMAIL US.